03/05/2016
What Expenses Can You Deduct From a Security Deposit?
Being a landlord is a careful balance. On the one hand, you want to make a profit. On the other hand, you want to cultivate a positive relationship with your tenants, and to make sure they’re happy with their rental arrangements, which will make them more likely to stay. Everything, from your pet policy to your rules on maintenance is looking for that middle ground. One of the hardest questions for most landlords to answer, though, is what expenses can you deduct from a security deposit?
Well, the answer varies from one jurisdiction to another, but there are some expenses the law agrees on across the board. Some of those include…
Expense #1: Damages Caused by The Tenant
Any damages over and above what’s considered average wear and tear on an apartment, and which require repair by the landlord, can be deducted from a security deposit. That’s why it’s also referred to as a damages deposit by some renters.
What constitutes “over and above” and “average wear” though? Well, some examples include:
– Broken doors and locks
– Broken windows and window screens
– Broken bathroom tiles
– Holes in the walls
– Excessive stains, burns, or holes in the carpet
– Broken appliances or toilet
The list goes on and on, but generally speaking if a tenant has done significant damage to the apartment, then the landlord can take the cost of repairs out of the security deposit. That includes things like replacing the carpets, putting in new windows, or buying new appliances because the old ones were broken through continued misuse.
Expense #2: Undoing Tenant Alterations
Not all deductions from a security deposit come from damage to the apartment. Some of them come from alterations made by the tenant. For example, if a tenant chose to paint a white apartment a shade of deep purple, and it was part of the initial contract that the walls had to be made white again, then the repainting is something that can come out of that tenant’s security deposit. The same is true for tenants who replaced light fixtures, cabinets, or made any other changes to the base apartment; putting it back to rights can be deducted.
Expense #3: Clean Out and Extermination
Sometimes a tenant doesn’t take all of their stuff with them when they vacate. Sometimes tenants leave behind an insect infestation, like fleas or ticks, along with their stuff. When that happens the cost of a cleaning up and removing all the former occupant’s things, along with the cost of any fumigation or other extermination services, can be deducted from the security deposit.
What Constitutes Regular Wear and Tear?
Regular wear and tear is a difficult to pin down idea, but it’s in the lease to stop landlords from charging tenants for things that happen naturally when someone lives in an apartment. For example, toilets back-up on occasion as part of their general use. Shower drains get clogged, window blinds get dusty, and paint that’s in the sun will fade. Anything that falls under a list of chores or usual upkeep, like replacing batteries in smoke detectors, isn’t something a tenant is responsible for. If they hung up a few pictures, or the carpet under their desk chair has been tramped down, then those are things that come along with occupation. They aren’t excessive, and therefore they aren’t things a landlord can charge for.
How Can You Be Sure?
Ideally, you should be able to talk to your tenants, and to work out something that you both agree on when it comes to charges. A post-move walk-through with a checklist, and photos of what the apartment looked like when the tenant first moved in, would be perfect. Since we don’t live or rent in a perfect world, though, landlords often have to use their own judgment based on the laws in their jurisdiction, and their experience with previous tenants.
For more information on keeping your rental property running smoothly, simply contact us today!
